Justia Commercial Law Opinion Summaries

Articles Posted in Supreme Court of Illinois
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TURSS provided background and credit screening services to property management professionals and landlords through its online platforms and undertook to build an online platform to sell customizable electronic lease forms. TURSS sent Helix a letter of intent that the platform would be completed in 2009. The companies entered into a five-year marketing agreement that required TURSS to provide the platform and Helix to provide the product. TURSS would receive 35% of the revenue generated from sales and Helix would receive 65%. The agreement was not exclusive. Helix provided electronic forms and supporting materials to TURSS but the platform was still not completed in 2015.Helix sued TURSS for“willful and intentional” breach of contract, fraud, negligent misrepresentation, and promissory estoppel. The court ultimately granted TURSS summary judgment. The appellate court and Illinois Supreme Court reversed, finding that Helix failed to present proof of its damages with reasonable certainty. Helix did not present evidence of revenues of a similar product or a similar business in a similar market. Where a plaintiff seeks lost profits for a new company, "without a track record of profit, attempting to sell a new and untested product to a new market,” the specter of impermissible speculation arises. View "Ivey v. Transunion Rental Screening Solutions Inc." on Justia Law

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Walworth, a former stockholder, sued Mu Sigma, a privately held data analytics company, and Rajaram, the company’s founder, CEO, and board chairman, alleging that after reaping the benefits of Walworth’s $1.5 million investment and reputational capital, the defendants embarked on a fraudulent scheme to oust Walworth of its substantial ownership interest in the company.The Cook County circuit court dismissed the complaint, citing the stock repurchase agreement (SRA), which included anti-reliance and general release provisions. The appellate court reversed, holding that the anti-reliance language was ambiguous. The Illinois Supreme Court reinstated the dismissal, stating that “the broad and comprehensive release agreed to by [Walworth], a sophisticated party represented by experienced counsel, unambiguously encompasses” the unjust enrichment and breach of contract claims. The bargained-for anti-reliance provisions reflected the understanding that there may be undisclosed information but that Walworth was satisfied by the information provided. Walworth had direct access to Rajaram to negotiate the arm’s-length transaction at issue and Rajaram was not acting as a fiduciary for Walworth. A corporation owes no fiduciary duty to its shareholder and Delaware law does not impose “an affirmative fiduciary duty of disclosure for individual transactions.” View "Walworth Investments-LG, LLC v. Mu Sigma, Inc." on Justia Law

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In 1987, Whitaker opened commodity futures trading accounts that eventually were assigned to Wedbush. Whitaker did not enter into a new customer or security agreement with Wedbush. Wedbush held Whitaker’s funds in customer segregated accounts at BMO Harris, which provided an online portal for Wedbush to process its customers' wire transfers. In December 2014, Wedbush received emailed wire transfer requests purporting to be from Whitaker but actually sent by a hacker. Wedbush completed transfers to a bank in Poland totaling $374,960. Each time, Wedbush sent an acknowledgment to Whitaker’s e-mail account; the hacker apparently intercepted all email communications. Whitaker contacted Wedbush after receiving an account statement containing an incorrect balance. After Wedbush refused Whitaker’s demand for the return of the transferred funds, Whitaker filed suit seeking a refund under the UCC (810 ILCS 5/4A-101). The circuit court rejected the UCC counts, stating that Wedbush had not operated as a “bank” under the UCC definition. The appellate court affirmed.The Illinois Supreme Court reversed, rejecting an argument that an entity may not qualify as a bank if it does not offer checking services. Courts construe the term “bank” in article 4A liberally to promote the purposes and policies of the UCC. The term “includes some institutions that are not commercial banks” and that “[t]he definition reflects the fact that many financial institutions now perform functions previously restricted to commercial banks, including acting on behalf of customers in funds transfers.” View "Whitaker v. Wedbush Securities, Inc." on Justia Law

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Plaintiffs purchased a recreational vehicle (RV) from Vacationland for $26,000.25. When it leaked during a rainstorm, they brought it in for repair. When it leaked again, causing extensive damage, they brought it back. A little more than two weeks after they dropped it off the second time and without a timetable for when the vehicle would be repaired, they told the seller that they no longer wanted the RV and asked for their money back. Plaintiffs sued, citing revocation of acceptance under the Magnuson-Moss Warranty-Federal Trade Commission Improvement Act, 15 U.S.C. 2310(d); breach of implied warranty of merchantability under the Magnuson-Moss Act; revocation of acceptance and cancellation of contract under Illinois’s adoption of the Uniform Commercial Code; and return of purchase price under the UCC. Defendant argued that plaintiffs’ failure to give it a reasonable opportunity to cure was fatal to their claims. The circuit court granted the defendant summary judgment. The appellate court affirmed. Plaintiffs sought review of the revocation of acceptance claim under the UCC (810 ILCS 5/2- 608(1)(b)). The Illinois Supreme Court reversed. The plain language of subsection 2-608(1)(b) does not require that the buyer give the seller an opportunity to cure a substantial nonconformity before revoking acceptance. View "Accettura v. Vacationland, Inc." on Justia Law

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Plaintiff’s class action complaint alleged that Walgreens violated the Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, by unlawfully collecting a municipal tax imposed by Chicago on purchases of bottled water that were exempt from taxation under the ordinance. The circuit court dismissed the action, citing the voluntary payment doctrine, which provides that money voluntarily paid with full knowledge of the facts cannot be recovered on the ground that the claim for payment was illegal. The appellate court reversed, reasoning that the complaint pleaded that the unlawful collection of the bottled water tax was a deceptive act under the Consumer Fraud Act. The Illinois Supreme Court reinstated the dismissal, first holding that claims under the Consumer Fraud Act are not categorically exempt from the voluntary payment doctrine. The court rejected an argument that the receipt issued by Walgreens constituted a representation that the tax was required by the ordinance. Misrepresentations or mistakes of law cannot form the basis of a claim for fraud. View "McIntosh v. Walgreens Boots Alliance, Inc." on Justia Law

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Defendant had worked as an intern at the radio station Blakey managed but was rejected for employment. After he repeatedly tried to contact station employees, defendant was informed that he was not welcome at the station and should stop making contact. He continued his behavior. Defendant was convicted of stalking (720 ILCS 5/12-7.3(a)(1), (a)(2)) and cyberstalking (720 ILCS 5/12-7.5(a)(1), (a)(2)), based on allegations that he called Blakey, sent her e-mails, stood outside of her place of employment, entered her place of employment, used electronic communication to make Facebook postings expressing his desire to have sex with Blakey and threatening her coworkers and employer and that he knew or should have known that his conduct would cause a reasonable person to fear for her safety and to suffer emotional distress. The appellate court vacated the convictions, finding subsection (a) of the statutes invalid. The Illinois Supreme Court affirmed, holding that the speech restrictions imposed by subsection (a) do not fit within any of the “historic and traditional” categories of unprotected speech under the First Amendment. Subsection (a) does not require that the prohibited communications be in furtherance of an unlawful purpose. Given the wide range of constitutionally protected activity covered by subsection (a), a substantial number of its applications are unconstitutional when judged in relation to its legitimate sweep. The portion of subsection (a) that makes it criminal to negligently “communicate[ ] to or about” a person, where the speaker knows or should know the communication would cause a reasonable person to suffer emotional distress, is facially unconstitutional. View "People v. Relerford" on Justia Law

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Chicago's personal property lease transaction tax ordinance levies a tax on the lease or rental in the city of personal property or the privilege of using in the city personal property that is leased or rented outside the city. The lessee is obliged to pay the tax. In 2011, the department of revenue issued Ruling 11, as guidance to suburban vehicle rental agencies located within three miles of Chicago’s borders. Ruling 11 stated that, in the event of an audit, the department of revenue would hold suburban rental agencies responsible for paying the tax unless there was written proof that the lessee was exempt, based upon the use of the leased vehicle outside the city. Absent such proof, the department would assume that a customer who is a Chicago resident would use the leased vehicle primarily in the city and that a customer who is not a Chicago resident would use the vehicle primarily outside the city. Hertz and Enterprise filed suit. The circuit court enjoined enforcement of the ordinance against plaintiffs with respect to short-term vehicle rental transactions occurring outside the city’s borders. The appellate court reversed. The Illinois Supreme Court found the tax unconstitutional under the state constitution Home Rule Provision. Absent an actual connection to Chicago, Ruling 11, which imposed the tax based on only a lessee’s stated intention or a conclusive presumption of use in Chicago based solely on residency, imposed a tax on transactions that take place wholly outside Chicago borders. View "Hertz Corp. v. City of Chicago" on Justia Law